Genting SP: Goldman Sachs upgrades to Neutral from sell, raises TP to $2.05 from $1.70. Says confidence in a sustainable run rate for Spore’s gaming market (GGR) is on the rise, tips mkt to expand to $7.9b by end FY11. Forecast is 7% ahead of its previous forecast, and 15% above annualized 4Q’s mkt size of $6.9b. Notes the incremental demand will be VIP driven (est +18% yoy growth vs mass mkt +12% growth).
Reverses view that Chinese VIPs are captive to Macau, believes RWS’ VIP volumes are at the high end of Macau at est rolls of US$6.1b /mth in FY11E, vs Macau peers of US$4.8b. Notes that overall, RWS has better profitability, with daily gross revenues amongst the highest in the industry at $12.1m in FY11E, vs Macau peers of US$4.5m...
Adds, GENS is arguably the more dominant operator in Spore, and should maintain its 56% market share, ahead of earlier expectations of an even split.
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